Johannesburg, South Africa, April 8, 2024 – To increase access to finance for renewable energy and affordable housing in South Africa, IFC today announced a partnership with Standard Bank Group, one of the biggest banking groups in Africa.
IFC's $300 million sustainable Tier 2 capital loan will allow Standard Bank South Africa, a wholly owned subsidiary of Standard Bank Group, to on-lend and support renewable energy projects and home loans to low-income home buyers in South Africa, 50 percent of which will be used for home loans to women borrowers.
IFC sponsored $260 million of this loan from its own account and mobilized the remaining $40 million from commercial investors.
South Africa, which is currently facing an energy crisis, derives most of its energy from coal which makes up 80 percent of the energy mix. IFC's financing will play a role in assisting the country to reduce its reliance on coal powered energy. It will also support the increasing demand for affordable housing. South Africa faces a housing deficit of about 3.7 million dwellings, with most of the demand being for low-cost homes driven by low-income earners, according to the Center for Affordable Housing Finance.
"The successful conclusion of this $300 million sustainable loan provides financial resources to enable the bank to continue supporting our customers on their social and environmental plans," said Kenny Fihla, CEO of Corporate and Investment Banking at Standard Bank Group. "We are delighted to partner with IFC and drive positive impact across the continent."
"Our partnership with Standard Bank is a testament to our shared vision of a sustainable future and our dedication to advancing economic growth in the country," said Adamou Labara, IFC Country Manager for South Africa. "It will support South Africa's transition to a low carbon economy and also help expand access to affordable housing."
Standard Bank is focused, primarily through its sustainable finance division, on providing financial products and services that support positive sustainability outcomes, including green and social loans and bonds, sustainability-linked loans and bonds, sustainable trade and working capital solutions and impact investing.
The funding is aligned with IFC's strategy of promoting climate friendly investments and addressing South Africa's housing shortage through private sector investments. It builds on IFC's long-term relationship with Standard Bank. In 2020, IFC anchor-invested $200 million in Standard Bank's first offshore green bond to increase access to climate finance, and in 2023 IFC provided a $250 million loan to help Standard Bank scale up its climate finance portfolio.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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